The People’s Bank of China intends to tighten the fight against illegal activity in the field of cryptocurrency trading, including banning foreign sites to serve local investors and strengthen monitoring of their operations. This was reported by Reuters, citing today’s statement of the regulator.
The announcement is accompanied by an extensive list of types of employment that are banned and should be suppressed by local authorities. According to the publication, financial institutions, payment companies and IT firms are prohibited from servicing cryptocurrency transactions.
The Central Bank explained that all services that allow exchanging traditional currency for digital or cryptocurrencies among themselves are considered illegal. Among other things, this applies to over-the-counter cryptocurrency exchange services provided by, for example, Huobi, OKEx and Binance. After the ban on exchange trading in 2017, such services have become the main tool of cryptocurrency trading for Chinese residents.
Separately, the inadmissibility of cryptocurrency derivatives trading services is noted. Chinese residents working for foreign exchanges may be subject to prosecution, the regulator warns.
Since May, Chinese authorities have been actively cracking down on miners and have already succeeded in forcing most of them to stop mining cryptocurrency or move overseas. The bitcoin market reacted negatively to today’s announcement. Shortly before, the cryptocurrency hit a four-day high above $45,000 amid Twitter’s announcement that it was adding support for bitcoin transactions. Following the news from China, the BTC price fell 5.5% in an hour and was back below $43,000. Twitter shares were up 4% yesterday after markets closed.